Albania External Debt (% of GDP)

External Debt in Albania

Annual GDP growth moderated but remained upbeat in Q4, held back by a slower expansion in household spending but supported by a faster increase in fixed investment. Data for Q1 paints a mixed picture. Tourist arrivals were up over 50% in Q1 compared to the year-earlier period. Moreover, inflation declined in the quarter, although it remained elevated. Meanwhile, imports and exports growth decelerated in Q1, with these dynamics translating into a narrower trade deficit compared to Q1 2022. On the fiscal front, the budget surplus widened in annual terms in Q1, as revenue growth outpaced the increase in expenditure. Lastly, in April Moody’s affirmed the country’s B1 rating with a stable outlook. The rating agency mentioned the country’s falling debt burden and the EU accession process as positive drivers, offsetting moderate fiscal strength and government liquidity and banking sector risks.